In a terrific Q&A with Jena McGregor, the management editor at Business Week, Christensen says that the iPhone is really a sustaining technology, not a disruptive technology. “They’ve launched an innovation that the existing players in the industry are heavily motivated to beat.” “it’s not [truly]disruptive,” he says. “History speaks pretty loudly on that, that the probibility of success is going to be limited.”

Wow. Christensen argues that the telcos are pushing their own music download services onto their mobile phones. It’s not as good as downloading from iTunes for many people but it’s getting better and it may be good enough for most folks.

Hmmm. I think Christensen is wrong here. For one thing, ATT/Cingular is signing with Apple. That leaves, what, Verizon and a couple of smaller players. There’s isn’t that much competition left. Apple may have a lock.

What do you think?

Reader Comments

Jim Rait

June 19, 2007 12:32 PM

I've read 3 of Christensen's books now and I'm glad to have some of the terms redefined for me. Looking back as Andrew Hargadon has done with Bell Labs makes it fairly obvious what went well and not so well on the Christensen model but I also find it difficult to see looking forward what the platform for growth is going to be. On disc drives Christensen talks of the then new 1.4/1.1 in? disc drives which seemed to be heading into the automative innovation space. Then iPod arrives to mop up the supply! But have Apple built their growth platform on iTunes+ITMS+music industry agreements? Charles Fine's Clockspeed does a really interesting job with double helix showing how modularisation comes in and goes out again as the industry evolves. So maybe iPod is the double helix kicking in as the visible, buyable bit of a new iTumes-like platform?

Chris

June 19, 2007 2:40 PM

The iPhone is not for everyone. I'm personally interested and have been following all information about it, but I'm NOT willing to pay all that money for it. I get to use several handhelds at work and I can already get my music and videos on my BlackBerry, I get corporate e-mail (which the iPhone lacks). On the Windows side, there are a ton of apps (a lot are free). The only thing missing might be decent web browsing and the cool factor. I can live without those.

biggity2bit

June 19, 2007 3:28 PM

I agree with you.

We've seen and heard consistently over the years about how iTunes' dominance of the market is about to be thwarted, and yet (to date) no one has nailed the ease of interface or quality of experience iTunes and Apple provides. There may be something to the point about other competitors already working on competing products to the iPhone, but until companies can improve the connection between their handsets and the home computer, I just don't see purchasing content for your phone to be a significant market changing advantage. The power and promise of the iPhone is rooted in the success (and pre-existing content) of the iPod.

Mike

June 19, 2007 4:22 PM

Hasn’t it already disrupted the industry? I would say it has and everyone else is scrambling to catch up.

don

June 19, 2007 8:01 PM

I agree with Mike. Apple has disrupted and everyone else is scrambling to catch up.

95% of people right now use their phone to make phone calls and nothing else. Within five years the ratio will have decreased substantially with people using their PDA's for the internet, music, video, text and voice messages; they will be using the device 50% of the time to make a phone call.

The IPhone is going to beat everyone to the PDA market and create brand equity.

When the next-generation of wireless communications catches up the IPhone will be the standard device where you will get music and video on demand, and they will control the distribution via iTunes and Apple Tv--that's powerful.

Apple didn't invent the MP3 player; they recognized the opportunity. Most people don't know yet how ubiquitous the Multi-Functional Device will be, and the IPhone is going to have brand-equity and dominate this space as the Ipod has done with the MP3.

Crawford

June 19, 2007 8:42 PM

I agree with Mike. I think the disruption has already occurred in one important respect: those who realize that the iPhone is more than a phone, more than an iPod, more than a PDA, but not quite any of those, want one. Bad. And will pay gladly to push the iPhone around in its envelope. Thinking different.

D.Oliver

June 20, 2007 4:39 AM

The iPod took advbantage of several deficiencies in pre-existing mp3 players: portable interface, connection w/PC, PC software and interface.

The iPhone has a promising new product interface, and iTunes for loading music. That's enough to make me pay attention, but as far as syncing information is concerned Blackberries and Win mobile phones are not as difficient as were those other mp3 players. Apple's advantage will depend on those things that it has to do well now: keyboard(we'll see how the touch screen turns out and I still haven't seen little things like keyboard over web page to type in a url), battery life(wouldn't want to run down the battery playing videos and be without a phone), syncing a calendar(easy enough, but Outlook is everywhere).

The "disruption" has a bit to do with Apple's past introductions. But it is largely the result of the rest of the industry's fear of moving outside of their comfort zone.

Jon King

June 20, 2007 11:25 AM

Like several other responses, I think the disruption has happened. Although I think that is the wrong term. Technology is fueled by innovation, it would be more disruptive if someone didn't deliver the new.

What I wonder about is what's next? What will the next generation of iPhones be and how will they synchronize with the rest of our daily activities? I think we should be excited about this level of pedestrian based, accessible and applicable product. I don't really care who it comes from as long as it's well done. Right?

For now... Apple has a solid history with doing it right.

jDuke

June 21, 2007 5:53 AM

If it's all about North America, yes, iPhone has a great chance to win. If we're talking about the whole music/content download market worldwide, the future of iPhone is still in questions.

Simply look at Japan, iTune has not gained a significant share in music download, though Japan is the 2nd largest market for Mac & iPod sales. Some other European countries also pose similiar cases too.

Simply put, without a well understanding on Telecom business, and mobile users' behaviors, the selling point for iPhone will be limited to nothing but the branding.

Chris Conley

June 22, 2007 2:53 PM

Not to go professor on ya'll, but 'disruptive' means something very specific in Christensen's definition. It isn't a question of whether the iPhone will be successful or not. The iPhone is not a disruptive innovation precisely because it competes directly with existing solutions with MORE functionality and at a HIGHER cost. Classic disruptive solutions/technologies are aren't as good as existing solutions, have less features, are less expensive, and initially find traction in niche places. They are dismissed by incumbents because they are seen as inadequate. Over time, the disruptive solution evolves to become the dominant technology or solution. Yes, the debate is on whether iPhone will be successful or a flop. Yes, some manufacturers are dismissing it. Perhaps you could argue battery life will be poor. But the iPhone does not really have the characteristics of a disruptive solution in Christensen's original sense.

John Newman

June 23, 2007 10:13 PM

This is an intersting debate on whether iPhone is a sustaining or disruptive innovation. It is too early to draw any conclusion as we have yet to see the adoption of iPhone as well as to what extend it will create new behavior. We can debate whether iPhone is a disruptive innovaiton or not. No question it has potential for game changing. There's an interesting analysis by Idris Mootee on www.mootee.typepad.com on whether the iPhone is a game changing gameplay for Apple or AT&T.
BTW I follow your blog everyweek. It is great.

bruce nussbaum

June 23, 2007 11:22 PM

John,
Thanks. Been busy this week with a workshop between BW and IDEO and haven't had time to post.
Now off to London to give a speech at the RCA. I'll get back to blogging soon.
Bruce

Pete Mortensen

June 25, 2007 10:14 PM

The iPhone is neither a sustaining innovation nor a disruptive innovation - it's breakout. By breakout, we mean a product that addresses an existing market and existing set of needs, but does so in a way uniquely suited to tap into an unmet need of that market.

That can end up meaning, like in the iPod's case, that the device does something that others have done before (play digital music files) but does so in a way directly tied into computer software and with an elegant interface. The iPhone is still a phone, an mp3 player and an Internet browsing device, but it does all three in a really compelling way that connect to each other. It has disrupted the market, but only because it's a great solution, not because it meets a new need.

Disruptive innovations are quite distinct, and I don't entirely buy Christensen's definition of them. For example, Christensen would not have considered Starbucks a disruptive innovation in the coffee market, even though no company has created new growth in that market than Starbucks. We define a disruptive innovation based on how well-understood and -met the need and solution, and how much your behavior has to change. In the case of Starbucks, no one would have said in a focus group that they were looking for a $3 cup of coffee, or that they needed a third place, or that they understood why they would want to change the way they lived to accommodate those things, but the resulting growth was just tremendous.

What Apple is poised to do is drive new growth, promote interest in multifunction devices and make a bunch of money in the process. But no one is going to decide to surrender the territory they're claiming to them, as they might in a disruptive situation. People know exactly what the iPhone is for, why it's a potentially major advance in technology, and it basically works like a phone, other than the software keyboard.

TW

February 25, 2008 8:20 PM

Starbucks is disruptive because of its environment, not its product. At bottom, it was about being "alone together," a function once served by American public space. Such space was all but extinct when Starbucks started its climb. Furthermore, Starbucks is disruptive of bars and offices, not coffee. Think about it: the same pickup options, with lower-functionality entertainment for a lesser cost. Or the same ability to work, more or less. The coffee is just the horrendously profitable part. It's arguable whether this space is such a competitive advantage now..but Metcalfe's Law on the increasing advantages of an established network makes up for them. If you want proof, look at how the Bux is a boon for local coffee shops, which typically compete by offering "funky" and much less appealing space and service, i.e. by disrupting the cultural space of their corporate competitor.
The iPhone is not disruptive at all in Clayton's sense, but a classic example of overserving an audience. Read the books. A disruptive innovation would be a phone that worked only with other phones of its type, plus got satellite radio, for $10.

silvia

April 30, 2009 4:57 PM

There are two components of the iPhone I would look at: hardware and software.

The touchscreen was a feature that other phones had, but it is only with the iPhone that this feature became a must. Now, most consumers want it. Nevertheless, I don't think this is disruptive, but rather a incremental innovation. It is like adding three blames to a razor. It doesn't create a new market: it better serves an existing one.

However, if we look at the software, it seems that the app store created a new market, so in that sense the applications for the iPhone might be seen as a disruptive technology.

To TW: I don't think that Starbucks is disruptive. It just copied the Italian model of the coffee shop and made it a franchising. A good way to look at the Starbucks case is from the perspecitve of the "economy of experience" as described by Pine & Gilmore.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.